Login Register Subscribe
Current Issue

Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Ratings agency predicts potentially staggering global cyber security losses

Reprints

A global cyber security risk could potentially cost the insurance industry multiples of what a nuclear loss would cost, says A.M. Best, in a report.

Recent research indicates that a “total realistic probable maximum loss” for a cyber security risk globally is now about $31 billion, says the Oldwick, New Jersey-based rating agency in its report.

While that is within the reinsurance capacity for a single-event risk of $100.8 billion, it is “well above” that of $4.6 billion for a nuclear loss, says the report, which is dated Nov. 24, but was widely distributed Monday.

“Effective risk management will require a holistic approach where a company's technology, people, and processes diligently work in concert to minimize cyber-security risk” says the report, “A.M. Best's View on Cyber-Security Issues and Insurance Companies.”

The report discusses Best's approach to evaluating cyber security. “A.M. Best expects insurers to provide detailed information on their specific cyber-security insurance policies and through the utilization of various techniques be able to aggregate such exposures and arrive at a potential loss estimate in the foreseeable future,” the report says.